In the following, reference is made to FIG. 1 that shows a typical power chart of a synchronous electric generator.
This power chart has a X axis defining the reactive power (per unit) and a Y axis defining the real power (also per unit). In particular it shows the generator operating limits defined by the rotor current 2, stator current 3 and stability limit 4; the stability limit 4 originates from a point 9 called short circuit ratio, in short SCR, that is a design parameter.
In addition, in case the prime motor is a turbine, also the turbine limit 5 is shown.
The stator current 6 (represented by a vector originating from the center 7 of the diagram) and the rotor or field current 8 (represented by a vector originating from the short circuit ratio (SCR)) converge to the generator operating point 10.
Loads connected to the grid may behave:                like electric resistances, in this case they absorb real power, but do not absorb reactive power;        like electric inductances, in this case they do not absorb real power, but do absorb reactive power; and        like electric capacitances, in this case they do not absorb real power, but do generate reactive power.        
Typically, loads have a mixed behaviour, such that they absorb real power and, at the same time, also absorb or generate reactive power.
In particular, during normal operation, the electric grid has an overall resistive and inductive behaviour, such that real power and reactive power are absorbed by the electric grid; correspondingly the generators must provide real power and reactive power. This operation is usually called lagging power factor operation and corresponds to the operating point 10.
Real and reactive power absorbed by the grid vary during the year and, in some cases, also during the day; thus, regulation is needed.
In some cases (for example during the night) the real power absorbed by the electric grid decreases and, likewise, the reactive power absorbed by the electric grid also decreases; in some cases the electric grid starts to behave as a capacitance and generate reactive power.
When this occurs the generators connected to the grid must be able to absorb this reactive power.
In order to absorb reactive power from the grid, the operating point must be moved along the turbine limit 5 from point 10 toward the stability limit 4 (as indicated by arrow F), to bring the generators to the so called leading power factor operation.
This regulation is limited by the stability limit 4, because when the stability limit 4 is overcome the electric generator loses synchronism with the electric grid.
Therefore such a regulation has strict limits and only limited amounts of reactive power may be absorbed this way.
In order to be able to absorb a sufficient amount of reactive power, customers usually require generators to be manufactured that have a high design SCR 9, such that the stability limit 4 is far apart from the Y axis (in fact the larger the SCR, the larger the reactive power that can be generated regulating the operating point by moving it along the turbine limit 5 since the stability limit 4 comes out from the SCR).
Increase of SCR however causes the rotor or field current 8 to increase during normal operation (i.e. at the operating point 10); this causes an efficiency drop and an increase of the generator size.